Unite Regulatory News (UTG)

THE UNITE GROUP PLC

('Unite Students', 'Unite', the 'Group', or the 'Company')

UNITE UK STUDENT ACCOMMODATION FUND £250M EQUITY RAISE AND £111M ACQUISITION

The Unite Group plc, the UK's leading manager and developer of student accommodation, announces the Unite UK Student Accommodation Fund ('USAF') has successfully raised £250 million of new equity from external investors. The proceeds represent 17% of USAF's NAV as of March 2019.

Unite has agreed to sell three assets to USAF for a total consideration of £111 million (Unite share £83 million), representing a net initial yield of 5.5%. The assets are located in Portsmouth and Leeds and total 1,223 beds. On a pro forma basis Unite Group's LTV falls to 25%.

Unite is not participating in this equity raise in order to retain funding capacity for its secured development and partnerships pipeline and future investment opportunities. Unite's stake in USAF will reduce from 25% to 23% when the equity is fully drawn. These sales form part of planned disposals of £100-150 million (Unite share) during 2019.

Following the acquisition, USAF has significant further investment capacity of £250-300 million and has a number of further investment assets that are currently under offer from third parties that it expects to acquire over the coming few months.

Joe Lister, Unite Students Chief Financial Officer, commented:

"Demand for high quality investment opportunities in the purpose built student accommodation sector remains strong with the full allocation of new equity being taken up by investors. The confidence shown in both the fund's ability to deliver consistent returns and Unite's ability to drive value from its operating platform has allowed USAF to raise £250 million. The equity raised will allow USAF to continue to improve the quality of the portfolio by continuing to invest in the strongest markets."

ENDS

About USAF

USAF is a non-listed open-ended fund focused on acquiring high quality student accommodation in university towns and cities across the UK. In March 2019, the fund was independently valued at £2,266 million, making it the country's largest specialist student accommodation fund for non-direct investors.

Launched in 2006, USAF has established a track record of successful long term investment in locations where demand for accommodation is consistently high. With a portfolio of 24,771 beds in 67 properties and 21 cities, it is among the top performing funds in the MSCI/AREF UK Specialist Fund Index. All of USAF's profits are paid out in the form of cash distributions.

All of USAF's properties are managed by Unite according to an exacting set of brand standards, focused on the things that students value most. For Unite, the fund provides additional investment capacity and represents an important component of the company's balance sheet. This funding flexibility in turn delivers scale which, when combined with Unite's market leading operating platform, helps drive operating efficiencies.

USAF's strategy remains focused on providing a vehicle for long term institutional investors to access a diversified portfolio of high quality student accommodation, managed by the UK's leading operator, which delivers sustainable earnings. All investments are determined on the basis of strict criteria focused on aligning the fund with high and mid-ranked universities in the best locations.

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